FR 2021-02568

The document in question, issued by the Postal Regulatory Commission, highlights a request from the Postal Service seeking an exemption from the annual revenue limitation for a market test named "Extended Mail Forwarding." This service aims to ensure that individuals, families, and businesses receive mail even after changing addresses by allowing them greater control over mail forwarding expiration dates. Initially tested in nine postal districts, the service has expanded to a nationwide scope due to supposedly strong results. The request is to increase the allowable revenue from this service from $10 million to potentially $50 million annually.

Summary of the Document

The Postal Service has filed a request with the Postal Regulatory Commission to allow more revenue from its market test of an experimental product named "Extended Mail Forwarding." The test is expected to surpass its current annual revenue limit of $10 million, hence the request to increase it to $50 million. The Commission has invited public comments on this request and expects them by February 10, 2021.

Significant Issues and Concerns

Several significant issues arise from this document. Firstly, the Postal Service requests a substantial increase in potential revenue caps—from $10 million to $50 million—which necessitates careful scrutiny to avoid financial imprudence. The validity of such an increase is grounded in projections and customer adoption metrics, which, as estimates, might prove inaccurate and risk financial miscalculations.

Another concern is the expansion of the service from nine districts to a nationwide scale, dubbed as resulting from "strong results," yet lacking a transparent elaboration of what those strong results entail. This omission leads to a lack of clarity around the decision-making process.

The document employs complex language, which can create barriers to understanding. Simplifying the terminology would greatly aid public comprehension. Moreover, the method of adjusting the revenue limit using the consumer price index is briefly mentioned but not detailed, leading to potential confusion regarding its impact on the stated revenue caps.

There is also an issue with the deadline for public comments. Providing a relatively short window until February 10, 2021, may not afford enough time for thorough public engagement and feedback.

Lastly, the role of the Public Representative, appointed to serve the general public's interest, is acknowledged but not sufficiently detailed, creating potential uncertainties regarding their actual influence or contribution to this proceeding.

Impact on the Public

Broadly, this request may impact the public by affecting how mail forwarding services are administered and priced, influencing their availability across the nation. Should this request be granted, the potential for increased revenues could mean improved services; however, it could also result in increased costs for consumers.

For specific stakeholders, the extension of the service nationwide potentially benefits customers by providing more flexible mail forwarding options. Conversely, the proposal might adversely affect small postal competitors, who might view the Postal Service's expanded capabilities and revenues as threatening traditional competitive balance, posing a risk of unfair market advantage.

In summary, while the document presents a case for extending the financial limits on the Postal Service's experimental product, the proposed changes demand careful scrutiny to safeguard public interests and maintain financial viability. Attention to transparency, plain language, and public involvement will be essential to navigating these proposed regulatory changes effectively.

The Federal Register notice filed by the Postal Regulatory Commission discusses a request by the Postal Service for an exemption from the $10 million annual revenue limitation for a market test of an experimental product known as Extended Mail Forwarding. If granted, this exemption could allow the product's revenue to reach $50 million per year, adjusted for inflation. Understanding these financial figures and their implications is crucial for evaluating the proposal's potential impact.

Financial Overview

The central financial matter in this document is the potential increase in revenue ceiling from $10 million to $50 million. This represents a substantial increase that requires scrutiny. The Postal Service anticipates that it will surpass the current $10 million threshold within the present quarter, further prompting the need for this exemption.

As of the close of FY 2020, Quarter 4, which included testing in nine postal districts, the market test generated $655,352. After expanding the test nationwide at the beginning of FY 2021, Quarter 1, revenues increased significantly to $7,958,925.30. These numbers highlight the rapid growth potential of the Extended Mail Forwarding service.

Financial Projections and Justifications

The Postal Service projects collecting $31.8 million during FY 2021 if current trends continue. This figure remains below the potential $60,139,860 annual limit the exemption would allow if granted, demonstrating a conservative approach relative to the new cap. However, as with any forecast, these figures depend heavily on assumptions about market trends and customer uptake that may not materialize as expected.

Despite the optimistic revenue projections, the justifications in the document need to be critically examined. The Postal Service claims that a nationwide expansion resulted in "strong results," yet detailed data supporting this claim is not provided, which can create a perception of a lack of transparency.

Inflation Adjustments

The mention of using the consumer price index (CPI) for adjustments to the $10 million limitation introduces additional variables. While the CPI effectively adjusts for inflation, the document does not elucidate how specific CPI changes will affect the revenue thresholds. This absence might cause ambiguity about future financial parameters and their real-world applicability.

Public Engagement and Process Clarity

The public has been invited to comment on this exemption request by February 10, 2021, which allows little time for review and response, especially considering the implications and potential changes in financial limits. Ensuring thorough public engagement is essential for transparency and accountability.

The role of the Public Representative in this process is noted but not extensively defined, which could lead to uncertainty regarding how public interests are considered in financial and operational decision-making.

In summary, while the financial aspirations of the Postal Service in seeking this exemption appear poised for substantial revenue growth, the projections' accuracy and the justifications behind these changes demand close evaluation and clear communication for successful implementation and public reassurance.